Labour raises £1m in Obama-style online fundraising drive

Labour has raised more than £1m in a Barack Obama-style online fundraising drive that has seen a surge in small donations over the past year.

The party has been emailing supporters urging them to donate during that time, with buttons that people can click if they want to donate £5, £10 or £20. Many of these messages are personal in tone, addressing the recipient by their first name, and sent by Ed Miliband or shadow cabinet members.

In contrast to the US, raising money online is relatively new for UK political parties. Separately, Labour managed to raise £2.7m in 23,000 small donations made in response to letters and phone calls.

The party’s total income for last year was £34m, of which £12m came from membership fees, £9m from affiliated unions, almost £7m from grants and £6m from commercial activities and fundraising.

Lucy Powell, vice-chair of Labour’s general election campaign, said her party was “proud to be funded by the generous donations of many working people in this country”.

“While the Conservatives rely on the money of hedge funds and an exclusive group of super-rich donors – the same people who they have rewarded with tax breaks – Labour will win this election with the support of millions of teachers, nurses, shop workers and working families,” she said.

The Conservatives have similarly been on a fundraising drive over the past year, including an effort to get people to donate online in amounts ranging from £10 to £500. The party has also been raising money through its “leaders clubs”, which give those who donate more than £50,000 a year the chance to dine with David Cameron and other ministers.

In the last quarter of 2014, the prime minister and his cabinet wined and dined 45 wealthy businessmen, some of whom are helping fund the party in marginal seats that could swing the outcome of the election. The group has collectively donated more than £40m to the party since the last election. Of this, around 40% comes from those linked to the hedge fund industry, which was given a tax break worth £125m in 2013.

Overall, donors who belong to the club have targeted about £5m at local constituency associations, of which more than 70 are marginals. Separately, the campaign group 38 Degrees said one in six of the Conservative party’s donor dinner groups is linked to private equity funds, the industry which is benefiting from from a tax loophole worth more than £700m.

Labour disclosed its information about online fundraising ahead of the Electoral Commission’s new data on donations amounting to more than £7,500 over the past quarter. Before that publication, the Electoral Reform Society released a new report saying 61% of the public believe the current funding system is corrupt and in urgent need of reform. It called on parliament to tackle the issue “or else the scandals will just keep coming”.